Does institutional logic matter in microfinance delivery? An empirical study of microfinance clients

Victor Atiase, Samia Mahmood, Yong Wang

Research output: Contribution to journalArticle

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Abstract

Purpose: From an institutional theory perspective, the purpose of this paper is to investigate the combined impact of financial capital (microcredit) and human capital development (entrepreneurship training) delivered by financial non-governmental organisations (FNGOs) on the performance of micro and small enterprises (MSEs) in Ghana. Design/methodology/approach: Adopting a multiple linear regression analysis, the study used primary data collected from 506 Ghanaian MSEs. Microcredit was measured using four main constructs, namely, loan cost, loan amount, the flexibility of loan repayment and loan accessibility. Entrepreneurship training was measured using four main constructs, namely, training content, training efficiency, training frequency and training accessibility. MSE performance was also measured using three main indicators, namely, sales, employment and profitability growth. The study controlled for business age, industry category, manager’s educational level and gender. Findings: The results of this study show that the combined delivery of financial and human capital development by FNGOs has a significant impact on MSE performance. The social welfare logic adopted by FNGOs seems to be legitimate to the needs and growth of MSEs in Ghana. However, the cost of microcredit remains a drawback, constraining the performance of MSEs in Ghana. Research limitations/implications: This study was carried out in the Volta Region, which is one of the ten regions of Ghana. Even though the sample size suffices, the findings from this study could not be generalised to the whole of Ghana. Also, this study is a quantitative study and could benefit from a triangulated method where the qualitative inputs could offer insights into the findings in this study. Originality/value: Theoretically, this study contributes to the understanding of institutions and the type of impact they have on the growth of MSEs. Practically, the provision of a conducive environment and access to financial capital is crucial to the growth of MSEs. Also, the adoption of the social welfare logic in microfinance delivery could be one of the major steps in promoting the performance of MSEs in Ghana.

Original languageEnglish
Pages (from-to)(In-press)
JournalInternational Journal of Entrepreneurial Behaviour and Research
Volume(In-Press)
Early online date23 Sep 2019
DOIs
Publication statusE-pub ahead of print - 23 Sep 2019

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Microfinance
Institutional logics
Small enterprises
Micro-enterprises
Empirical study
Ghana
Loans
Microcredit
Financial capital
Non-governmental organizations
Accessibility
Entrepreneurship
Costs
Human capital development
Social welfare
Enterprise performance
Logic
Design methodology
Industry
Institutional theory

Bibliographical note

Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.

Keywords

  • FNGOs
  • Ghana
  • Institutional logic
  • MSEs
  • Microcredit

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)

Cite this

Does institutional logic matter in microfinance delivery? An empirical study of microfinance clients. / Atiase, Victor; Mahmood, Samia; Wang, Yong.

In: International Journal of Entrepreneurial Behaviour and Research, Vol. (In-Press), 23.09.2019, p. (In-press).

Research output: Contribution to journalArticle

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